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MONTHLY REVIEW of Credit and Business Conditions S e c o n d Federal Eeserve Agent M on ey F e d e r a l R e s e r v e D is tr ic t Federal Eeserve Bank, New York M a r k e t in F e b r u a r y One of the principal developments in the money mar ket during February was an unseasonable upward tendency in interest rates on commercial borrowing. Acceptance dealers, in the effort to attract investment demand sufficient to absorb the supply of new bills, made two further advances in their rates, following the January increases, and in the latter part of February 90 day bankers acceptances were offered at 5*4 per cent, a rate % per cent above that prevailing in Decem ber, and 1 % per cent above the rate of a year ago. Commercial paper also was advanced slightly further in February, and at 5 % to 5 % per cent in the latter part of the month was 1 % to 1 % per cent higher than in February of last year. Ordinarily rates on these types of paper tend to be somewhat easier at this time of year than during the autumn. Loans of weekly reporting member banks, other than loans on securities, were liquidated in substantial volume during January, and in February remained only slightly above the volume of a year ago. Loans on stocks and bonds, however, were considerably higher than at any previous time with the exception of the recent tem porary year-end peak. A s the diagram below indicates, there was a liquidation of year-end loans early in Janu10 March 1, 1929 ary, but toward the end of that month and early in February, a renewed expansion occurred; so that on February 6 the volume of security loans of reporting banks was about 725 million dollars above the average for last August and September, and over 900 million dollars larger than a year ago. Part of the increase was in the form of open market loans to brokers and dealers in securities and part was in the form of direct loans to customers. A fter the first week of February there was a small reduction in the total amount of these loans, but the amount on February 20 was still over 900 million higher than a year previous. W ith the continued large demand for security loans, call loan rates fluctuated widely during February, vary ing from 6 to 10 per cent, in response to relatively small changes in the supply of funds, and time loans for security trading purposes continued in small supply at 7 % per cent. These high rates which have continued to be offered beyond the autumn and holiday seasons when money rates are usually firm are increasing the cost of commercial borrowing, especially borrowing through the open market in the form of acceptance cred its and commercial paper. Another result of the high rates offered by the New York security markets has been a movement of funds from other countries to New York, accompanied by general weakness in the foreign exchanges. Canadian 8 6 4 1 9 2 6 1 9 2 9 Rates on 90 day Time Money, 4 to 6 months Commercial Paper, and 90 day Acceptances, and Discount Rate of the Federal Reserve Bank of New York. 1928 192.9 Loans on Securities of Weekly Reporting Member Banks. MONTHLY REVIEW, MARCH 1, 1929 18 exchange at New York has been below the gold import point for extended periods, and the movement of gold from Canada has been considerably larger than the usual seasonal movement of recent years. Sterling also de clined below the gold import point, and substantial ship ments of gold from London to New York were followed by an advance in the Bank of England discount rate from 4 y2 to 5y2 per cent early in February. There are indications also that the central banks of other countries have found it necessary to support their exchanges, in order to avoid withdrawals of gold from their reserves for shipment to New York. Money rates prevailing in New York near the end of February are shown in the following table in compari son with those of a month previous and a year ago. M oney Rates at New York Feb. 29, 1928 Jan. 30, 1929 Feb. 27, 1929 Call m oney....................................................... Time money— 90 d a y .................................. Prime commercial paper............................ Bills— 90 day unindorsed.......................... Customers’ rates on commercial loans. Treasury certificates and notes Maturing June 15 ..................................... Federal Reserve Bank of New York rediscount rate........................................... Federal Reserve Bank of New York buying rate for 90 day bills................. * 6 -8 4 4 3H 7%-H *6H~9 7H 5X-X 5 1 5 .5 3 t 5 .5 0 3 .3 0 4 .8 1 4 .7 0 4 .4 6 4 .7 0 4 5 5 3H 5 5 y8 f 4 .2 5 * Prevailing rate for preceding week t Average rate of leading banks at middle of month B ro k ers L o a n s Loans to brokers and dealers in securities reported by New York City banks advanced to new high levels in each of four successive weeks up to February 6, and on that date were $274,000,000 above the previous peak of December 5. In the two subsequent weeks there was a net reduction of slightly under $200,000,000 in these loans; loans of New York City banks for their own account were reduced nearly $100,000,000, and loans placed for out-of-town banks were reduced $145,000,000, but these reductions were partly offset by a further in crease of nearly $50,000,000 in loans placed for others, which carried this latter account to a total of $2,668,000,000, a new high level. B il l M a r k e t The volume of dollar acceptances outstanding was reduced only $5,000,000 during January, despite the higher rates prevailing for this type of accommodation, and at the end of the month the total was $1,279,000,000, as compared with $1,058,000,000 a year ago. Following the increases in open market rates during January, the demand for bills in the first part of Febru ary showed some increase, but distribution in general was rather narrow. After a further increase of ^4 per cent in bill rates around the middle of February, which brought the offering rate for unendorsed 90 day bills to 5 1 4 per cent, the highest since July 1921, distribution became wider, due both to increased foreign buying and also to purchasing by domestic banks and other corpora tions, including insurance companies. The supply of new bills offered to the market was smaller than in Jan uary, and, although continuing in good volume, was not equal to the increased investment demand, so that the dealers’ portfolios were reduced by about one-half, not withstanding a decrease of $100,000,000 in the Reserve Banks’ holdings of bills. The decrease in the Federal Reserve System’s portfolio of bills reflected a large ex cess of maturities over new purchases, and was consider ably larger than the reduction that occurred in February of last year. C o m m ercial P a pe r M a r k et The commercial paper market was generally quiet dur ing February. The banks throughout the country evi denced relatively little interest in commercial paper offerings, and, although no great amount of new paper was created by mercantile concerns, an increase in the dealers’ stocks of unsold paper was reported to have begun around the middle of the month. A t that time, the going rate for the bulk of the prime names was ad vanced from 5y2 per cent to a range of 5 ^ - 5 % per cent. Even the offering of more attractive rates for the best names, however, did little to stimulate the inquiry for paper on the part of the banks. During January there was a larger increase in out standings of commercial paper than occurred a year ago. The amount outstanding through 23 firms, after declin ing to $383,000,000 on December 31, rose nearly 6 V2 per cent to $407,000,000 at the end of January. This figure, however, is 29 per cent smaller than the out standings in January 1928. C e n tra l B a n k R a te Changes The most conspicuous change in central bank rates during February was the increase of one per cent in the Bank of England rate, which was thus brought up to 5y2 per cent on February 7. Although the technical position of the Bank was strong, with a high proportion of reserve (46.02 per cent) and a relatively low level of bills and securities, the gold stock had fallen slightly below £150,000,000, and the weakness of sterling ex change in New York had drawn almost $30,000,000 gold to this center from London within a period of ten days. The differential in money rates as between New York and London was sufficiently in our favor to exert a de pressing influence on sterling exchange and threaten further withdrawals of gold from England. The rise in rate brought about a quick improvement in the sterling exchange and stopped the movement of gold. The 4 1 4 per cent bank rate had been in effect since April 21, 1927. On February 14 the Imperial Bank of India raised its rate by one per cent to 8 per cent. This was the second move upward since November 15, 1928, and rep resents a recurrent seasonal phenomenon. The rate was raised twice in the season of 1924-25, twice in 1925-26, three times in 1926-27, and twice in 1927-28. The Bank of Java increased its rate by one-half per cent to 4 y2 per cent on February 25. The 4 per cent rate had been in force since July 15, 1926. F o r e ig n E xchange Interest in the foreign exchange market centered upon the pound sterling which continued, during the first week of February, the downward movement begun on 19 FEDERAL RESERVE AGENT AT NEW YORK D O LLA R S D O LLA R S January 11. On February 6 there was a sudden firming of this exchange which was further strengthened by the announcement on February 7 of a one per cent increase in the official discount rate of the Bank of England. Since then the pound sterling has maintained itself above the gold import point from London, although it is still about 1.4 cents below parity. The German reichsmark, which had begun to show weakness in January, fell towards the middle of Febru ary to $.2372. Some recovery has since taken place, but this exchange in the neighborhood of $.2373 is still about nine points below par and is hovering around our gold import point from Berlin. Other European exchanges have been under pressure, particularly since the advance in the English bank rate, and the French, Dutch, and Italian rates are approximately at their outgoing gold points. The Spanish peseta has been unsteady: at $.1517 on the 28th it was 80 points below the February high of $.1597 reached on the 1st. A ll the F ar Eastern exchanges moved in our favor during the month, including the Japanese yen, which dropped below 45 cents on February 25 for the first time since August 1928. The American exchanges also were weak, with the Canadian dollar particularly sub ject to fluctuation and ruling at last report at a discount of about cent. G o ld M ovem en t Despite the persistence of Canadian exchange at a level even lower than the January average (*4 cent dis count), which brought over $39,000,000 in gold here from Canada during that month, only $2,000,000 of D O LLA R S Canadian gold was shipped here during February. The inflow of gold from England which began late in Janu ary continued during the first part of February, when this country received $22,000,000 in gold from London, bringing the total of British gold in this movement up to $29,250,000. Other transactions were very small in volume and took place independently of exchange con ditions. No changes in earmarking were recorded. According to a preliminary calculation, the gold movement during February was as follows: imports $24,500,000; exports $1,000,000; net gain to the United States $23,500,000. This slightly exceeded the loss in January, making for the year to date a net gain of $5,500,000. C u r r e n c y S ta b iliz a tio n in R o u m a n i a A new monetary law establishing the Roumanian cur rency on a gold basis and adopting a program of sta bilization has been passed by the Roumanian Parliament and became effective on February 7, 1929. This law fixes the new value of the leu at 10 milligrams of gold 9 /10th fine, which is equivalent to 167.18 lei to the dol lar and makes the gold value of the leu .59815 cents. The first portion of a stabilization and development loan was issued here and abroad in the second week of Febru ary. A s a part of the plan of monetary stabilization credits were arranged in favor of the National Bank of Roumania by certain banks of issue. In that connection the following announcement was issued by this bank on February 1 4 : “ The Federal Reserve Bank of New York, in asso ciation with other Federal Reserve Banks, has agreed, 20 MONTHLY REVIEW, MARCH 1, 1929 if desired, to purchase from the National Bank of Roumania up to a total of $4,500,000 of prime com mercial bills. The agreement of the Federal Reserve Bank of New York was made in cooperation with other banks of issue as a part of the credit arrange ments aggregating in all $25,000,000, or its equivalent, which the banks of issue have entered into with the National Bank of Roumania in furtherance of the plans which have been completed for stabilizing the Roumanian currency on a gold exchange basis.” S e c u r ity M a r k e ts Around the beginning of February, representative averages of stock prices generally reached the highest levels ever attained. Price movements became irregular during the first week of the month, however, and a rather sharp decline in prices followed, which lasted until around the middle of the month. Subsequently, there was some recovery, and toward the end of the month industrial stocks were close to their previous peak levels, but railroad and public utility stocks re mained about 3 per cent below. The turnover of shares on the New York Stock Exchange, which had been in 4 to 5 million share volume early in the month, declined to between 3 and 4 million shares after the 15th. The bond market remained quiet in February and prices continued to decline. Domestic corporation issues dropped about % point further on the average, and reached a lower level than prevailed in August of last year when the decline of some months was temporarily terminated. Current quotations for domestic corporate bonds are the lowest since the fall of 1926. United States Government bonds, which fluctuate principally in response to changes in money conditions, showed sizable losses during February. The net de clines for the month ranged from small fractions of a point in the case of the relatively short-term First and Fourth Liberty 4 % ’s to over 2 full points in the Treas ury 4 ^ ’s. Foreign bonds likewise moved lower during the month. N ew F in a n c in g A complete compilation of new security issues in Jan uary shows a total for that month of $1,063,000,000, or only about $100,000,000 less than the very large total for December. A s compared with the corresponding month of 1928, January new financing was $300,000,000 larger, due entirely to issues of corporations organized to deal in securities. Securities issued by concerns of this type constituted in January more than one-third of all corporate issues, and in December they comprised nearly one-third of the corporate financing, whereas in January a year ago, their importance was practically negligible. New financing by states and municipalities was somewhat smaller in January than a year ago, and the amount of new foreign security offerings placed in this market was considerably smaller than last year. In February, domestic corporation offerings continued to be composed of a very large proportion of stock issues, and these stock issues again included a substantial vol ume of offerings by corporations, essentially in the na ture of financial, holding, or investment companies. Excluding these issues for financial purposes, it appears that the volume of domestic corporate financing in Feb ruary was slightly smaller than a year ago. Foreign security offerings in this country continued in smaller volume than in the corresponding period of 1928. E m p lo y m e n t a n d W ages Employment in January, both in New York State and in the country as a whole, showed only about the usual decline, which is a result of the seasonally low level of both manufacturing and out-of-door activities. This bank’s index of the volume of factory employment, in which adjustment has been made for the usual sea sonal variations, has held steady for several months, indicating that industrial employment has been subject to only the customary seasonal influences. The ratio of orders for workers to applications for employment at JUL- AU&* .SEP- OCT NOV- DEC- JAN- FEB MM- APR- MAY- JUN* Ratio of Workers Called For to Registrations For Employment at New York State Employment Offices. New York State employment bureaus, which provides a rough index of general employment conditions, is shown in the accompanying diagram. Since the autumn peak, this ratio has declined in about the usual seasonal pro portion, and at the present time is considerably higher than a year ago, and is nearly at the level of two years ago. In general, it appears that, while there is a certain amount of unemployment, it is entirely seasonal in nature. Moreover, conditions are much better than at this time last year, when a low level of business activity accompanied the usual seasonal decline in out-of-door activities. The largest improvement over a year ago, according to the State employment bureau, has occurred in the employment of unskilled labor, but, as has been the case for some time, a considerable number of un skilled workers remain without employment. Substan tial improvement has also been shown in opportunities for both skilled and ‘ ‘ white-collar 9’ labor. Charity or ganizations have made large expenditures this year for relief work, but this is said to be a result more of the 21 FEDERAL RESERVE AGENT AT NEW YORK epidemic of influenza than of unemployment. Cases of serious distress due solely to unemployment are esti mated to be about one-half as numerous as a year ago. Average weekly earnings of factory workers and fac tory payrolls declined in January, both in New York State and in the country as a whole, but remained above the levels of a year previous. During the first three weeks of February, there ap pears to have been a continuation of the decline in build ing activities. The daily average volume of contracts awarded in 37 states during this period was about 20 per cent smaller than in the corresponding period of 1928. P r o d u c tio n B u ild in g Total building contracts awarded in 37 states east of the Kockies declined 5 per cent further in January, and reached a figure 4 per cent smaller than in January 1928, according to the F . W . Dodge Corporation. The total for the month was also smaller than in January 1926 but was somewhat larger than in January 1927. The decline from a year ago was due largely to a reduc tion in residential building, the volume of which was 29 per cent smaller than a year ago and also the small est for any month in the past four years. A ll types of residential building work showed at least small decreases, with the principal reduction, amounting to more than one-third, in apartment house construction. Commer cial and industrial construction contracts, on the other hand, were considerably larger than in January of last year, so that, in the aggregate, non-residential building showed an increase of 16 per cent. The accompanying diagram indicates that residential contracts have been declining almost continuously since last May and have dropped considerably below the level of a year ago, but that contracts for other types of con struction have shown only about the usual seasonal de cline during recent months and have averaged larger than in a year previous. In the New York and Northern New Jersey district, the January decline was larger than for the country as a whole, amounting to 26 per cent compared with the preceding month, and 22 per cent compared with Janu ary 1928. A s in the total for the 37 reporting states, the decline in this district reflected much smaller con tracts for residential building. Following a slightly lower level in November and December, productive activity in the leading industries increased substantially in January, after allowance for the usual seasonal variations, and in general was at least equal to the peak levels of September and October. Production of both passenger automobiles and motor trucks increased sharply in January to a new high level for the month; as compared with January 1928, passen ger automobiles showed an increase of 71 per cent, and motor trucks an increase of 97 per cent. Total produc tion, after allowance for year-to-year growth and for seasonal variations, was the largest ever recorded. Out put of bituminous and anthracite coal increased con siderably, after seasonal allowance, and production of petroleum was the largest for any month on record. Mill consumption of both cotton and silk also increased substantially; consumption of cotton was the largest since March 1927, and consumption of silk was the larg est since March 1928. Production of pig iron showed only about the usual seasonal expansion in January, and production of steel ingots increased slightly less than usual, but both were at very high levels. This bank’s indexes of production, in which allowance has been made for seasonal variations and for year-toyear growth, are shown in the following table. (Computed trend of past years=100 per cent; adjusted for seasonal variations) 1929 1928 Jan. N ov. Dec. Jan. 95 101 94 89 125 111 84 99 98 97 100 90 90 97 141 100 99 109 114 104 100 116 110 88 106 85 127 104 98 120 114 121 110 104 113 118 94 93 112 113 84 109 86 p 122 98 96 114 104r 126 102 98 113 113 106 96p 127 116p 92 112 103 89 108 95 101 101 108 93 84 89 105 105 93 108 104 89 100 83 115 83 97 96 136 101 112 97 110 108 97r 129 97 107 103 75 99 85 97 93 135 103 92 89 110 105 84r 118 102 82 106 91 108 87 Producers* Goods MILLIONS o f M L L M S Cotton consumption........................................ Woolen mill activity*..................................... Silk consumption*............................................ Bituminous coal................................................. Copper, U. S. m ines........................................ Tin deliveries...................................................... Leather, sole........................................................ Paper, total......................................................... 12i 105 83 141 104 136 Consumers’ Goods Hogs slaughtered............................................... Cattle slaughtered............................................ Sheep slaughtered............................................. Calves slaughtered................................ .. Farm produce shipped.................................... W heat flour.......................................................... Sugar meltings, U. S. ports.......................... Anthracite coal................................................... Paper, newsprint............................................... Printing activity............................................... Tobacco products............................................. Boots and shoes................................................. Tires..................................................... .................. Automobile, passenger.................................... Automobile, truck............................................. Building Contracts Awarded in 37 States. ♦Seasonal variation not allowed for p Preliminary r Revised 103 113 105 91 li7 97p 129 172 164 MONTHLY REVIEW, MARCH 1, 1929 22 F o r e ig n T r a d e Both exports and imports of merchandise showed con siderable increases during January. Imports, valued at $371,000,000, were $32,000,000 larger than in De cember and larger than in January of the past two years, despite lower prices on import commodities in general. Exports, valued at $491,000,000, showed an increase of $15,000,000 over December, instead of the usual sea sonal decline, and were larger than in January of any year since 1921. The favorable balance of trade also was larger than in January of any year since 1921. Compared with a year ago, exports of finished manu factures showed an increase of $50,000,000, or about 30 per cent; all other groups of exports showed gains. The volume of raw cotton exports showed a seasonal decline from December, but was greater than a year ago. Grain shipments abroad were valued at somewhat more than in the previous month and one-third more than in Jan uary 1928. Imports of crude materials increased in value 6 per cent over a year ago, due no doubt to the large volume of rubber imports. The volume of crude rubber im ported was about 13 per cent above that of January 1928, and was the largest ever recorded. Quantity re ceipts of raw silk were considerably above those of a year ago, or of the previous month. Combined imports of finished and partly finished manufactures gained about 18 per cent over a year ago. ance. Debits in 140 centers outside of New York City, however, declined somewhat from the high level of De cember. (Computed trend of past years=100 per cent; adjusted for seasonal variations) 1929 1928 Jan. N ov. Dec. Jan. 102 93 85 102 85 100 101 98 103 104 88 102 98 91 89 106 86 98 101 98 lOOp 113p 104 p 99 lOOr 98 87 102 87 97 97r 102 106 99 95 101 93r 108 113 103 93 96 96r 92 96 106 95 Primary Distribution Car loadings, merchandise and misc......... Car loadings, other........................................... Panama Canal traffic...................................... Wholesale trade................................................. Distribution to Consumer Department store sales, 2nd D ist.............. M ail order sales................................................. Advertising.......................................................... General Business Activity Bank debits, outside of New York City Bank debits, New York C ity ....................... Velocity of bank deposits, outside of New York C it y ........................................................ Velocity of bank deposits, New York City Shares sold on N . Y . Stock Exchange. . . Postal receipts.................................................... Electric power.................................................... Employment in the United S tates............ Business failures................................................ Building contracts, 36 states....................... New corporations formed in N . Y . State 107 142 108 173 115 183 108 185 109 140 234 88 102 95 108 140 117 117 191 393 84 107 98 103 118 115 121 201 330 89 102 98 96 111 112 121 202 442 85 General price level............................................ Composite index of wages............................. Cost of livin g...................................................... 173 221 172 178 224 172 178 226 171 179 224 172 p Preliminary 98 102 123 120 r Revised In d e x e s o f B u s in e s s A c t iv it y C o m m o d ity Average daily car loadings of merchandise and mis cellaneous freight declined somewhat less than usual in January, and loadings of bulk freight increased sub stantially. The volume of foreign trade also increased after seasonal allowance. On the other hand, there is some evidence that retail trade, on an average daily basis, did not hold all of the gains made in December; sales of department stores in this district, mail order sales, and chain store sales declined more than usual. Trading on the New York Stock Exchange was in very heavy volume, and bank debits in New York City in creased further to a new high level, after seasonal allow The general level of commodity prices has shown little change since December, but movements of individual commodities have been very erratic. This is a situation which has prevailed for more than a year; during this time, the Bureau of Labor Statistics index has fluctuated within a range of 4 points, but in January 1929 was at practically the same level as in October 1927. The accompanying chart illustrates the wide fluctua tions that have occurred in prices of individual commodi ties, and especially the complete absence of any uniform ity of movement between the commodities. A s the diagram indicates, movements in the various commodi- H OLLARS P E R BUSHEL D OLLARS P E R CWT. P r ic e s CFNTS P E R POUND 45r 30 HIDES RUBBER 15 JAN APR Movement of Prices of Selected Commodities, January 1928 to February 1929. JUL 1926 OCT JAN 1929 FEDERAL RESERVE AGENT AT NEW YORK ties have frequently been in opposite directions, and thus have tended to offset each other. In recent weeks, rubber has advanced substantially above the levels that have prevailed since last May, while hides have broken sharply to the lowest prices in nearly two years; wheat and hog prices rose to the highest levels in several months, while cattle prices declined to the lowest levels since the autumn of 1927. Important and conflicting movements have occurred also in commodities not shown in the chart. For instance, copper has advanced to successive new high levels since 1920; refined sugar has declined to the lowest price since 1922. A composite of these widely varying prices, however, indicates com paratively little change in the general level of com modity prices. W h o le s a le T r a d e Wholesale dealers in this district reported in January the largest increases in sales since October 1928. Sales of stationery, groceries, and shoes showed substantial increases over a year ago following decreases in Decem ber. Machine tool sales continued to be considerably above a year ago, but as sales were in large volume in January 1928 the percentage increase was not as large as those reported a few months ago. Increases continued to be reported in the sales of drugs, paper, cotton goods, silk, and diamonds, while hardware and jewelry sales were below those of a year ago. Stocks of silk goods and drugs remained larger than last year, but stocks held by cotton jobbers and shoe dealers continued to be smaller than last year. Hard ware dealers reported the largest decrease in stock since December 1927. Percentage'! Change January 1929 | compared with December 1928 f Percentage Change January 1929 compared with January 1928 Per cent of Accounts Outstanding December 31 Collected in January Commodity N et Sales + 3 .3 Groceries........................... + 4 5 .7 M en ’s clothing............... Cotton goods— Jobbers — 1 1 .0 Silk goods*....................... + 3 9 . 8 Shoes.................................. — 6 .8 + 4 3 .4 D ru gs................................. Hardware.......................... — 2 9 .3 + 6 .4 Machine to o ls**............ + 7 .2 Stationery........................ + 6 .8 Paper................................. + 9 .6 Diamonds......................... Jewelry.............................. — 6 6 .6 Weighted A v erage... Stock end of month N et Sales — 0 .4 + 5 .4 — 1 .9 + 4 .8 + 7 .3 + 8 .8 + 2 8 .3 — 2 .2 + 3 4 .1 + 7 .0 + 5 .0 + 1 .2 — 7 .1 + 1 5 .7 — 6 .5 + 1 5 .1 + 5 .9 + 2 8 .4 } — 2 .6 + 1 2 .1 + 6 .4 Stock end of month 5 .1 + 1 5 .2 — 1 3 .9 1 + 1 9 .6 — 6 .1 } — 4 .5 1928 1929 7 2 .6 4 2 .7 7 3 .0 4 6 .3 5 0 .3 * 3 7 .2 5 1 .3 5 0 .1 47 *.8 3 9 .6 5 6 .4 5 1 .6 67 ’. 7 6 4 .6 e i'.o 6 7 .4 } 4 5 .6 } 4 6 .4 5 4 .5 5 5 .9 23 Collections on charge accounts, for the sixth consecu tive month, were better than a year ago, and stock turn over was slightly higher than in January 1928. January 1929 compared with January 1928 Locality The total sales of leading department stores in this district showed an increase of 4 per cent over a year ago in January, but as there was one more selling day in January of this year the average daily rate of sales was no larger than in January 1928. Increases, however, occurred in Buffalo, Newark, and Southern New York State, even after allowance for the extra selling day. Stock on hand end of month N et Sales Northern New York State........................... Central New York S tate.............................. Southern New York State............................ Hudson River Valley District..................... Capital District................................................. Westchester District....................................... + + — + + — — + — + — — — 4 .4 6 .7 5 .2 3 .6 5 .6 4 .3 4 .6 0 .1 3 .3 8 .3 3 .0 1 6 .7 8 .6 All department stores......................................... + Apparel stores........................................................ + New Y o rk ................................................................ Rochester................................................................. Bridgeport............................................................... + + + — + — — 1 .9 0 .4 2 .4 2 .0 2 .4 7 .6 4 .6 3 .7 + 5 .6 1928 1929 5 5 .4 5 6 .3 4 5 .8 5 8 .3 5 4 .0 4 8 .5 4 9 ‘. 8 50 ’. 5 4i’.4 4 2 .7 1 .9 5 2 .5 5 4 .1 — 5 .5 5 1 .3 5 4 .4 January sales and stocks in the principal departments are compared with those of a year ago in the following table. N et Sales Percentage Change January 1929 compared with January 1928 Stock on Hand Percentage Change January 31, 1929 compared with January 31, 1928 + 2 4 .4 + 1 6 .9 + 1 6 .4 + 1 2 .4 + 1 1 .1 + 1 0 .3 + 9 .9 + 9 .1 + 6 .1 + 5 .6 + 5 .3 + 5 .3 + 4 .1 + 2 .7 + 1 .0 — 3 .9 — 1 1 .8 — 1 9 .8 — 3 .4 — 3 3 .2 — 2 .4 + 5 .3 + 1 1 .4 — 9 .2 + 3 .2 + 1 1 .9 — 0 .9 + 3 .8 + 2 .4 + 1 2 .3 — 3 .8 + 2 .4 + 8 .4 — 8 .7 + 3 .1 + 2 .7 — 1 0 .2 — 1 .9 Musical instruments and radio. . . . . . . . Cotton goods.................................................... Toilet articles and drugs.............................. M en’s furnishings................................ Books and stationery.................................... W om en’s ready-to-wear accessories. . . . Luggage and other leather goods............. Home furnishings............................................ Linens and handkerchiefs............................ Toys and sporting goods............................. W om en’s and Misses’ read y-to-w ear.. . Silverware and jewelry................................. M en’s and Boys’ wear.................................. Silks and velvets............................................. W oolen goods................................................... Miscellaneous................................................... C h a in S to r e S a le s The total January sales of reporting chain store sys tems in this district showed increases in all lines. Gro cery chains showed the largest increase since last October, and the sales of shoe chains were larger than in any month since September. * Quantity not value. Reported by Silk Association of America ** Reported by the National Machine Tool Builders’ Association D e p a r tm e n t S to re T r a d e Per cent of Accounts Outstanding December 31 Collected in January Percentage h Change Percentage Change January 1929 compared with January 1928 Type of Store Ten cent.......................................................................... D rug................................................................................. Tobacco........................................................................... Variety............................................................................. T o t a l............................................................................ Number of Stores Total Sales + 1 .2 + 9 .8 + 9 .1 + 5 .8 + 9 .2 + 1 6 .3 + 1 2 .3 + 1 1 .8 + 5 .7 + 1 2 .8 + 0 .2 + 1 6 .2 + 1 5 .4 + 0 .3 + — + — + — — 4 .2 3 .7 3 .4 5 .3 6 .4 0 .7 1 0 .7 + + + 2 .8 5 .8 8 .8 Sales per Store 24 M O N THLY REVIEW, M ARCH 1, 1929 Business C o n d itio n s in the U n ite d States (Summarized by the Federal Reserve Board) T l/f AN UFACTURING and mining increased in January and the first part o f 1 * 1 February, while building continued to decline. Wholesale commodity prices rose slightly. Reserve Bank credit declined between the middle o f January and the middle o f February reflecting chiefly a reduction in reserve balances of member banks. P r o d u c t io n Minerals Combined, A djusted for Seasonal Vari ations (1923-25 average = 100 per ce n t). PERCENT W holesale Price Index o f United States Bureau o f Labor Statistics (1926 average = 100 per ce n t). BILL10N 5ofH O LLAR S Industrial production increased in January and continued to be larger than a year ago. Output o f pig iron, steel ingots, and automobiles was in record volume for January. The high rate o f steel activity reflected large purchases from automobile manufacturers and also increased demand from railroads. Domestic output o f refined copper, while continuing in large volume, was some what lower in January than in December. Activity of textile mills increased considerably in January. In the mineral group, output o f copper ore, bitumi nous coal, and petroleum was exceptionally large, and anthracite coal and tin also increased. In the first part o f February preliminary reports indicate the maintenance o f a high level o f industrial activity. Steel plants operated at a high per centage o f capacity; the output o f coal continued large and employment in Detroit factories increased. The production o f petroleum, however, declined slightly in the middle o f February. Building activity declined in January for the third successive month, reflect ing primarily a large reduction in awards for residential building, while com mercial building awards increased somewhat. The value o f building contracts let during the first six weeks o f the year was substantially lower than in the corresponding period o f either 1928 or 1927. T rade Shipments o f freight by rail increased during January and the first two weeks o f February and were larger than a year ago. The increase during Jan uary reflected primarily larger shipments o f coal and coke and livestock. Sales by wholesale firms were seasonally larger in January and above the level o f a year ago. Department store sales declined less than is usual at this season and were considerably larger than in January 1928. P r ic e s Figures for 12 Federal Reserve Banks (Latest Figures are Averages o f First 23 days of F ebruary). The general level o f wholesale prices rose somewhat in January. Prices o f grains, livestock, and meats advanced, and there were also price advances in steel, automobiles, and copper. A decrease in the group index for building materials reflected reductions in the prices o f lumber and brick, and prices o f pig iron, silk, cotton, and petroleum also declined. Among the raw materials, rubber advanced sharply in price, while silk, cotton, and hides declined. During the first half o f February, the price o f copper advanced to a new high level, and the price o f rubber continued to rise. Among the agricultural commodi ties, prices o f wheat, corn, and hogs rose, while sugar and cattle declined slightly. B ank 19£5 1926 1927 1928 1929 M oney Rates in the New Y ork Market. C r e d it On February 20 total loans and investments o f member banks in leading cities were nearly $90,000,000 smaller than in the middle o f January, owing chiefly to reductions in the banks * investment holdings. A fter the first week in February, security loans declined, while all other loans, largely commercial, increased somewhat in February. During the five weeks ended February 20, a decline in the reserve balances o f member banks, together with a considerable inflow o f gold from abroad and some further decline in the demand for currency, were the chief factors accounting for a decline o f $173,000,000 in the volume o f Reserve Bank credit in use. A large decline in Reserve Bank holdings o f acceptances and U. S. securities was offset in part by a small increase in the volume of member bank borrowing. Open market rates on bankers acceptances and commercial paper advanced, while rates on collateral loans showed little change.
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